Kukla's Korner Hockey

My thumb is down to the outgoing city council in Glendale, Arizona, many of whom are outgoing for a reason. Last week, they city voted for a 20-year, $308 million arena management fee for the future owner of the Phoenix Coyotes, assuming that particular unicorn ever turns out to be real. It's a municipality blackmailing itself on sunk money, and it's incredible. The city has already made cuts to services; it may make more. The deal is contingent on the team being bought by January 31, so the lockout could scuttle it, but if it goes through, your worst-case scenario is this: Phoenix makes the Stanley Cup final, attracts fans, loses, and doesn't have police or fireman when the riots begin.

Comments

Interesting how Arizona gets trashed for not supporting the Coyotes, but when they to a degree that NO city has ever done, they are trashed for being stupid. Maybe they know the economic impact of losing the team to the long term future of Glendale. My guess is they know what the choice means to them better than some douche from Toronto!

than some douche from Toronto!
Posted by timbits on 12/02/12 at 12:37 PM ET

Ouch!
When does it become time to cut and run? The colossal mistake of moving to Glendale will be the demise of this team. Sad, actually.

Posted by
Vladimir16
from Grand River Valley on 12/02/12 at 01:59 PM ET

Wow Timbit that’s a bit harsh, no? First I think your missing at least 1 word from that first sentence and second it seems like that sentence explains the writers view point perfectly. Phoenix is seriously lacking in through the turnstiles support so isn’t agreeing to another 20 years and sinking another 308 million into the team throwing good money after bad? Unless you think changing the name to the Arizona Coyotes as planned will bring in another 6 or 7,000 fans a game what’s changed to make you think it’ll work?

With Islanders leaving Long Island. Some have finally realized the affect the tumbleweeds will have on surrounding businesses. And the lost tax revenue that will have to be made up. If Coyotes leave, arena will be empty. Taxpayers will be paying debt on empty arena.

They lose a lot of money if Coyotes leave. The question is will they lose more or less by making these concessions?

The question is will they lose more or less by making these concessions?

Exactly!

A study conducted by a Valley economist said that the city of Glendale will be better off financially by keeping the Phoenix Coyotes rather than losing the team.

According to the study, the cost of operating a Coyotes- less Jobing.com Arena would total $315.3 million over 20 years,

So as a hockey fan, aren’t you happy to have the team get the financial support it needs to survive versus the failure of the franchise and the economic collapse of the city of Glendale’s major retail investment?

If not, you really don’t care about hockey or the city that has committed to the sport!

Maybe (a group of lame-duck councilors) know the economic impact of losing the team to the long term future of Glendale.

Posted by timbits on 12/02/12 at 12:37 PM ET

The cost of putting and keeping the team in Glendale has been something around 3/4 of a billion dollars (and climbing) to date, which has manifested at 50% of the city’s debt.

It’s hard to imagine that never having gotten into the “courting a professional sports team” business would have cost the city the same. Or that the arena being without a tenant would have cost the city 50 million in revenue, which is what keeping a tenant there has cost it.

It’s hard to imagine that never having gotten into the “courting a professional sports team” business would have cost the city the same.

I agree, the impact of developing the Westgate Sports and Entertainment district has been extremely costly. Though, few anticipated that the economy would collapse in 2008. Unfortunately, the choice of losing the Coyotes, with subsequent failure of the arena which would likely kill the entire Westgate development at a cost that exceeds the Coyotes payments is a difficult choice to make. This would happen along with $200 million in arena debt that remains, regardless of which choice you make. Basing todays decisions on emotional factors from past mistakes is a sure path to collapse.

No, I don’t care if others want Phoenix to stay in the NHL or not. My comment is based on the indepth discussion you have put into the CBA, but no analysis of the economics involved with the Coyotes, Westgate and Glendale. It is easy to say it was a dumb mistake to ever put a team in Phoenix, or they shouldn’t have built the arena. It is a lot more difficult to explain all of this with the complex economics involved in the decision. I guess I expect more from you than.

It’s a laughable decision by a group of people who won’t have any responsibility for it.

It isn’t laughable when you look into the impacts of losing the team entirely.

My comment is based on the indepth discussion you have put into the CBA, but no analysis of the economics involved with the Coyotes, Westgate and Glendale.

I care more about the CBA, which effects me, than I do about the Coyotes, who do not.

So I’ve spent more time looking at the CBA-issues than the issues of how stupidly a city 3000 miles away spends their tax revenues.

It isn’t laughable when you look into the impacts of losing the team entirely.

Oh, stop it. It’s not the cities job to try and keep strip malls and shopping centers on life support with tax dollars. Pouring more money down the Coyotes gullet is throwing stupid money after dumb money, and the dumb money was thrown down after bad money.

Questions:

1) Do you think that 300 million dollar commitment to the Coyotes was the single best way to spend those tax dollars? Not schools, education, business zones, public services… but a hockey team? That around 6% of the population of Glendale goes to see 11% of the year, assuming every single person that goes to the games lives in Glendale?

2) If you simply cut a 300 million dollar check and split it up between all of the local businesses allegedly negatively impacted by the departure of the Coyotes, would that be a greater or a lesser economic benefit to them?

3) Exactly what changes about the Coyotes as a franchise as a result of this institutionalized theft? Dollars to doughnuts the team is going to be run on the cheap and every single dollar of the tax commitments will go to offset ops losses. Hooray. Another borderline garbage team in a non-traditional market. What a great story.

It was a stupid decision to put the team there.
It was a stupid decision to keep the team there.
It is a stupid decision to spend 300 million dollars to double down on a previously stupid decision to keep the team there.

But hey, it’s just taxpayers money, right? It’s not like it actually counts.

If Glendale’s going to spend 300 mil to keep the team in Glendale, how about spending 150 mil and just buying the stupid team outright? Why pay somebody else 300 mil to own something you could have for half the price?

You know, since it’s such a public treasure that has to be protected at all costs and such.

Do you think that 300 million dollar commitment to the Coyotes was the single best way to spend those tax dollars? Not schools, education, business zones, public services… but a hockey team? That around 6% of the population of Glendale goes to see 11% of the year, assuming every single person that goes to the games lives in Glendale?

If you assume the city will lose $315 million with the loss of the Coyotes, based on economist studies, then it is wash. You will lose the $300 million either way, so why not go with the path that allows you the possibility of growth.

2) If you simply cut a 300 million dollar check and split it up between all of the local businesses allegedly negatively impacted by the departure of the Coyotes, would that be a greater or a lesser economic benefit to them?

It would, but the $200 million you have to pay on debt service whether you have the team or not and the revenue loss from retail sales and jobs, which multiply 3 times in the economy cannot be replaced. You don’t get a zero sum option here, you don’t get the option of spending the $300 million on other things, it disappears from the economy. The arena is built, the shopping centers and housing exist. This isn’t a choice of WHETHER to build the arena, but what to do now that it is built.

3) Exactly what changes about the Coyotes as a franchise as a result of this institutionalized theft? Dollars to doughnuts the team is going to be run on the cheap and every single dollar of the tax commitments will go to offset ops losses. Hooray. Another borderline garbage team in a non-traditional market. What a great story.

Considering the potential new owner was CEO of the San Jose Sharks, one of the best run franchises in the NHL, you can’t assume it will be run like the Gretsky fiasco that led to the current problem. As for your disdain of non-traditional markets, that is narrow thinking. The future of hockey is in California, Texas and places like Arizona. Before the Coyotes, Phoenix had 2 dumpy rinks. Now it has state of the art multi sheet ice complexes throughout the area. Phoenix has become a power in Junior hockey and US Hockey youth teams. Sure it isn’t Michigan yet, but give it 30 years of hockey and it will take a run at those traditional hotbeds. Lose the NHL, this progress will decline dramatically.

I agree, the impact of developing the Westgate Sports and Entertainment district has been extremely costly. Though, few anticipated that the economy would collapse in 2008. Unfortunately, the choice of losing the Coyotes, with subsequent failure of the arena which would likely kill the entire Westgate development at a cost that exceeds the Coyotes payments is a difficult choice to make. This would happen along with $200 million in arena debt that remains, regardless of which choice you make. Basing todays decisions on emotional factors from past mistakes is a sure path to collapse.

Posted by timbits on 12/02/12 at 06:07 PM ET

This is the type of thinking that turned $200 million in arena debt into $750 million in debt in a number of different coyote-related expenses. Sure not paying all that means you’ve spent $200 million total on an arena that houses nothing, but the yearly subsidies, expenses and bribes needed to keep a tenant there added up to almost triple that.

Continuing along this path is just throwing good money after bad to avoid admitting you already made an unfixable mistake.

If Glendale’s going to spend 300 mil to keep the team in Glendale, how about spending 150 mil and just buying the stupid team outright?

IF the league would allow it, I am sure they would take that option. No league allows community ownership, other than Green Bay, as it undermines the leagues ability to blackmail cities into buying new arenas with “revenue generating” capacity. Which leads to dilemna’s like Glendale is in today.

If Glendale’s going to spend 300 mil to keep the team in Glendale, how about spending 150 mil and just buying the stupid team outright? Why pay somebody else 300 mil to own something you could have for half the price?